Land-swap deal at heart of the Penang tunnel issue

The Penang government’s massive traffic alleviation project will consist of four major parts.

Three of these will be highways on the island which will serve as bypasses around the city centre.

They are a 4.2km road from Gurney Drive to the Tun Dr Lim Chong Eu Expressway bypassing the city centre, a dual-carriage road from Tanjung Bungah to Teluk Bahang and a 4.6km road linking Air Itam to the Tun Dr Lim Chong Eu Expressway.

The fourth will be a 6.5km undersea tunnel link connecting the island to Bagan Ajam on the mainland.

It is anticipated that all four parts combined will cost the state around RM6.3 billion, and that construction will likely begin in 2015, following the completion of feasibility and environmental studies, according to the state government.

Construction should be completed in 10 years, by the year 2025.

The tender process kicked off in November 2011 with a pre-qualification exercise and this saw 11 companies participating, out of which eight were selected.

Then the process moved on to a request for proposals in July 2012. Eight companies were invited to submit their proposals then, with only five having passed the selection.

It was from this shortlist that Consortium Zenith BUCG Sdn Bhd was chosen.

The consortium is a special-purpose vehicle and it is made up of a Malaysian-Chinese joint venture company.

It consists of Zenith Construction Sdn Bhd with a paid-up capital of RM3.5 million and China Railway Construction Corp Ltd, a paid-up capital of RM4 billion (70 percent).

Also, it includes the Beijing Urban Construction Group, a paid-up capital of RM541 million (10 percent), Sri Tinggi Sdn Bhd, a paid-up capital of RM3.7 million (10 percent) and Juteras Sdn Bhd, a paid up capital of RM1.0 million (10 percent).

Not much is known about the three local companies which are part of the consortium.

Critics have urged the state government to release more details on the three, and explain the contributions (aside from small amounts of paid-up capital) that they would bring to this massive project.

The tender process has also been mired in controversy and opposing NGOs and BN’s opposition have voiced their concern over both the process itself, and the consortium that was ultimately awarded the job.